On 11 February 2018, the Abu Dhabi Global Market Courts (ADGM courts) entered into a memorandum of understanding (MoU) with the Abu Dhabi Judicial Department, allowing for the reciprocal enforcement of judgments, decisions, orders and ratified or recognised arbitral awards between the ADGM courts and the Abu Dhabi courts.
The ADGM courts are part of the Abu Dhabi Global Market, an international financial centre for local, regional and international institutions. The ADGM courts were created in 2013, and like the DIFC courts, are located in a financial free zone. The ADGM courts are based on English common law and the Abu Dhabi local courts are based on civil law, similar to the DIFC courts and Dubai local courts, respectively.
The Abu Dhabi Law No. 4 of 2013 (ADGM Founding Law) has not provided an exact method for cross-enforcement of the judgments of the ADGM courts and the onshore Abu Dhabi courts. The ADGM Founding Law, however, itself envisaged, under Article 13, that there will eventually be agreements between the ADGM courts and other courts to facilitate cross-enforcement.
The MoU will allow judgments of the ADGM courts to be recognised and enforced in the onshore Abu Dhabi courts (and vice versa) in a simple procedure described below.
Key Developments Under the MoU
Article 2 of the MoU sets out the pivotal position that allows reciprocal enforcement to occur without re-examination of the merits of the original judgment. It provides a simple process as well as presents a mutual respect for each court by allowing judgments to pass unaffected between the ADGM and Abu Dhabi courts without being subjected to further consideration or scrutiny.
Once an arbitral award has been ratified or recognised by a court of origin, it will be classified as a judgment (as per Article 5 of the MoU).
Articles 6 to 10 of the MoU govern the enforcement of Abu Dhabi courts’ judgments in the ADGM and Articles 11 to 15 of the MoU govern the enforcement of ADGM courts’ judgments in onshore Abu Dhabi.
In order to be enforced, the judgment is required to contain an executory formula and be translated into English (for enforcement by the ADGM courts) or Arabic (for enforcement by onshore Abu Dhabi courts) (Articles 7 and 12). After the judgment creditor submits an application to the ADGM courts or onshore Abu Dhabi courts, a judgment will be enforced according to the relevant procedures but without re-examination of the merits of the judgment (Articles 10 and 15).
A New Conduit Jurisdiction?
Litigants will benefit from being able to enjoy a similar mechanism to the one that is currently in place in Dubai (through the DIFC courts and onshore Dubai courts).
The MoU will enhance the Abu Dhabi legal industry in terms of providing a more co-operative cross-court enforcement regime between courts in Abu Dhabi. More importantly, it will open doors for litigants by making it easier and more accessible for them to seek to resolve their disputes or enforce their awards.
Next Steps and the Future
Now that the MoU has been signed, the MoU is immediately in force. Parties can start using the ADGM courts to seek enforcement of foreign judgments and arbitral awards into the Abu Dhabi courts, therefore being able to enforce onshore provided there is the necessary connection with the ADGM courts.
It is yet to be determined how this will evolve and whether it will echo the development of the DIFC courts: for example, whether a Judicial Committee will be created and how conflicts of jurisdiction between the ADGM courts and Abu Dhabi courts will be dealt with.